Aluminium Bahrain, Alcoa Can Gather Bribe Data, U.S. Says

By David Voreacos -
Jun 21, 2012

U.S. prosecutors dropped objections
to the pretrial gathering of evidence in a lawsuit by Bahrain’s
state-owned aluminum producer, which claims it overpaid for raw
materials because of bribes directed by Alcoa Inc. (AA)

Aluminium Bahrain BSC, known as Alba, claims that New York-
based Alcoa bribed senior officials in Bahrain and caused Alba
to pay almost $500 million more than it should have for alumina,
the principal raw material in aluminum.

U.S. prosecutors have been investigating those allegations
since 2008 to determine whether Alcoa, the largest U.S. aluminum
producer, or anyone else violated the U.S. Foreign Corrupt
Practices Act. Prosecutors said yesterday in a court filing that
U.S. District Judge Donetta Ambrose in Pittsburgh no longer
needs to halt the pretrial collection of evidence, known as
discovery.

“The government has been able to conduct its criminal
investigation free from the distraction of parallel civil
discovery,” a Justice Department attorney, Adam Safwat, said in
court papers. “Commencement of civil discovery at this time
will not so unduly interfere with its ongoing investigation as
to warrant a continued stay of discovery.”

On June 11, Ambrose denied a request by Alcoa to dismiss
the lawsuit. Alcoa argued that the alleged conduct took place
outside the country and shouldn’t be litigated in the U.S.

The judge has scheduled a hearing on the case for June 25.

‘Home-Cooked’ Scheme

Alba claims in court papers that Alcoa and other defendants
used offshore shell companies to “perpetrate and conceal a
massive, home-cooked bribery scheme conceived, orchestrated, and
directed in and from the U.S.”

Alcoa has denied Alba’s claims.

In a hearing before Ambrose Nov. 2, Safwat said the probe
has taken so long “because the conduct that we are
investigating in this international corruption scheme spans the
globe from the U.S. to Australia, to the Channel Islands in
Europe and to Bahrain.”

Seeking witness statements and documents from different
countries has slowed the process, and bank records are critical
“because the scheme usually involves routing money through
layers upon layers of bank records, and we have to go from one
layer to the next,” Safwat said.